A partnership is a voluntary arrangement for the purpose of running a business, but it is not perpetual. Individuals can freely disassociate and, in some cases, can be compelled to leave. Partnerships are organized under state law, which means that legal guidelines vary. When speaking of partnership law in general, it is best to refer to the Uniform Partnership Act (UPA) as a framework, since it has been adopted by three-fourths of U.S. states and utilizes basic partnership law principles.

1. Terminate your relationship with the partnership. If you are the partner considering leaving, you can terminate at any time.

2. Determine if the business will continue without the partner. When a partner disassociates, the partnership has the option to terminate, as well. If there are three or more partners, and only one disassociates, the partnership can continue to exist.

3. Review the partnership agreement to determine if the partner should automatically be disassociated. The partnership is organized by a partnership agreement, which is a document drafted at the beginning of the enterprise laying out the guidelines as to how the business is to be run. If the partnership agreement specifies an act that causes automatic disassociation from the partnership, the partner is expelled from the organization.

4. Determine if the partner has done anything to be automatically disassociated. A partner is automatically disassociated when he cannot perform his partnership duties due to death or incapacity, he becomes bankrupt, or he assigns his financial rights to the partnership due to insolvency.

5. Expel the partner by unanimous vote. A partner can be expelled if it is determined that it is illegal to continue working with the partner. A corporate partner can be expelled if it is going to dissolve or it loses its right to conduct business.

6. Sue to expel the partner for violation of his duties to the business. A court where the partnership is headquartered can expel a partner if he has engaged in wrongful conduct that adversely and materially affected the partnership business, the partner breached the partnership agreement, the partner was not a loyal to the partnership and received personal gain from his disloyalty, or the partner engaged in conduct that makes it impractical for the disassociated partner to continue as an owner in the business.

7. Notify all partnership customers, suppliers, and contracting parties that the partner has disassociated. This is to protect the disassociated partner from being held liable for the partnership’s liability, and it protects the partnership for being liable for the former partner’s acts.

Warning

If you are planning to expel a partner or on disassociating from a partnership, consult with a licensed attorney in your area to ensure that you comply with all state regulations. While every effort has been taken to ensure that this article’s completeness and accuracy, it is not intended to be legal advice.

About the Author

John Cromwell specializes in financial, legal and small business issues. Cromwell holds a bachelor's and master's degree in accounting, as well as a Juris Doctor. He is currently a co-founder of two businesses.